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    Exports have long helped the United States dairy industry grow, and despite the obvious challenges of 2020, it was a remarkable year for an untapped market.
    Last year, U.S. dairy exports exceeded $1 billion while the southeast Asia region rose in volume exported by 26% year over year.
    “That growth moved the region ahead of Mexico to become our top export destination,” said Anoo Pothen, director of consumer insights for southeast Asia with the United States Dairy Export Council.
    Pothen, based in Singapore, spoke of this selective market during a presentation, “Opportunities to Grow U.S. Dairy with Consumers Internationally,” at the virtual Dairy Experience Forum July 13.
    Historically, the southeast Asia region – which includes Vietnam, Thailand, Philippines, Malaysia, Singapore and Indonesia – has been considered dairy deficient with lofty goals to increase dairy consumption over the next decade.
    “The combined deficit of these six Asian markets is the biggest in the world, but with urbanization and purchasing power, they are hoping to change that,” Pothen said. “Despite the pandemic, exports to Asia have grown and are expected to remain robust for fluid milk and yogurt.”
    In 2020, 12.9 billion liters (28.4 billion pounds) of milk was consumed in some form with plans to grow dairy demand to 19 billion liters (41.8 billion pounds) by 2030, said Pothen.
    “The government is promoting dairy’s importance,” she said.
    In order for the United States to fully capture this market share, there are three points to understand about the southeast Asia region and the value of dairy for those consumers.
    While this six-country region only accounts for 14% of U.S. gross domestic product, it is also 1.5 times the population of the U.S. with annual spending on food and non-alcoholic beverages exceeding $500 million.
    This population has long put an emphasis on healthy living and maintaining a diet scarce of sugary and fatty treats.
    One study Pothen referred to stated that 79% of urban Vietnamese consumers are willing to pay more for healthier foods. In the same token, more than half want to continue healthy habits long after the coronavirus pandemic is dismissed.
    “Gaining the COVID 15 (pounds) is a reality many consumers are grappling with,” said Pothen, noting 45% of the global population is trying to lose weight.
    In Malaysia, consumers are searching for fewer sugary drinks as the government implemented a sugar tax to reduce obesity two years ago.
    “Fluid milk is driving consumers because of the less sugar content,” Pothen said. “We expect to see that increased demand as people look for healthier options.”
    Additionally, in Singapore, 1 in 5 individuals will be over the age of 60 by 2040.
    “It would be remiss to ignore the importance of healthy aging and the role proteins play as this consumer segment grows in Asia,” Pothen said. “All age groups represent a significant opportunity for dairy.”
    Common dairy exports to this region include skim milk powder, whey powder and protein, and lactose for bakery and infant formulas. While fresh dairy like yogurt and fluid milk are available, they are mostly ultra-high-temperature pasteurized to accommodate an extended shelf life.
    Pothen did note a 43% uptick in cheese consumption due to the pandemic.
    “That increased consumption is likely to stick,” Pothen said. “They see Americans are consuming cheese as a healthy snack with low carbs and low sugars.”
    The potential of U.S. dairy products in southeast Asia is also driven by a growing middleclass.
    “As the middleclass grows, consumers normally work to elevate their nutrition,” Vikki Nicholson-West said. “They look at what to buy from what they’re seeing on the Food Network and online. In particular, cheesecake and U.S. cream cheese has grown because consumers have seen how to make it.”
    Nicholson-West is the senior vice president for export ingredient marketing at USDEC. She contributed to the presentation with Pothen during the Dairy Experience Forum.  
    There is vast opportunity within the southeast Asia market for U.S. dairy. One important aspect of this region is that Indonesia is also the largest Muslim population in the world, making halal foods an utmost priority.     
    USDEC has a regulatory advisory group that provides guidance on this form of food processing and ensures opportunity for exports.
    “It can seem daunting, but it’s really no different than exporting from one country to another and understanding unique elements between markets,” Nicholson-West said. “With every market, we’re competing on quality and meeting product specifications.”
    Southeast Asia is a growing opportunity for U.S. dairy products without diminishing the importance of other key markets, such as Mexico and China which remain significant in terms of U.S. market share.
    “The timing was right and this is a sweet spot in southeast Asia. They have an appreciation and affinity for dairy,” Nicholson-West said. “Ultimately, as an industry, we need to deep dive into dairy exports to help put money into pockets for American dairy farmers.”

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